Proposed $500,000 Non-concessional Superannuation Cap Gone!


The 2016/17 budget proposed a new lifetime cap on non-concessional (after tax) Superannuation contributions of $500,000. In other words, people could only ever put $500,000 worth of post-tax funds into their Superannuation fund during the course of their lifetime. They also proposed that this cap would be backdated to 1 July 2007, to include all non-concessional contributions made since that date.

Recently, the Government announced amendments to this proposal.

We’ll now be staying with the current method of an annual limit. However, that limit will be reduced to $100,000 per year, down from $180,000 per year, from 1 July 2017.

People aged under 65 will, however, still be able to ‘bring forward’ three years’ worth of non-concessional (after tax) contributions, which is intended to account for the fact that many contributions result from a one-off or irregular sale of property or a capital gain, which is often in excess of $100,000.

Here’s a nice window of opportunity

Before 30 June 2017:

  • If you’re under 65, you can still bring forward up to three years of non-concessional (after tax) at the current rate of $180,000 per year, to a total of $540,000. This assumes you haven’t already used this facility in the previous two financial years. (Work test applies if you’re over 65.)
  • If you’re aged 50 or more, you can make concessional (tax-deductible) contributions of up to $35,000 per year, or $30,000 if you’re under 50. This cap will be lowered to $25,000 for all ages from 1 July 2107.

If you are looking to add significantly to your superannuation in the next 9 months (either with a public offer super fund, or if you wish to start a Self Managed Superannuation Fund – SMSF), please talk with us as soon as possible to make sure you can maximise your benefits.

General advice warning: The advice provided is general advice only, as in preparing it we did not take into account your investment objectives, financial situation or particular needs. Before making an investment decision on the basis of this advice, you should consider how appropriate the advice is to your particular investment needs, and objectives. You should also consider the relevant Product Disclosure Statement before making any decision relating to a financial product.